Ontario moves to license condo managers

Ontario’s 1.3 million condominium owners are “out on a limb” and have not been getting the protection and support they need, says Realtor Linda Pinizzotto, founder and president of the province’s Condo Owners Association (COA).

Things appear to be starting to turn around, however. Following a year-long review by government and industry officials and condo owner representatives, Queen’s Park recently proposed improving Ontario’s 15-year-old Condominium Act in order to offer condo owners, tenants and buyers greater protection.

This initiative – part of the Ontario government’s stated plan to protect consumers while building a “fair, safe and informed marketplace” – is long overdue, says Pinizzotto. Besides being COA president, Pinizzotto is a long-time top-producing Sutton Group sales rep and the government relations chair for the Mississauga Real Estate Board.

She says that COA, a volunteer-run, non-profit umbrella association and advocate for condo owners across the province, has been lobbying for change since its inception three years ago. The association is inundated with over 100 emails daily from irate or concerned condo owners, she says.

Despite the explosion in condo building in Ontario in the past decade, the Condominium Act has not been updated since 1998, Pinizzotto says.

Linda Pinizzotto

“How brutal is that?”

About 10 per cent of Ontario’s population lives in condominiums and condos represent around 50 per cent of all new homes built in Ontario. There are almost 600,000 condominium units in the province and 9,000 condominium corporations, according to the provincial government.

Pinizzotto and others say there are numerous issues with the Condominium Act, which is overseen by the Ministry of Consumer Services. Pinizzotto says that a major point of contention for many condo owners is that they feel they have nowhere to turn when they have a dispute with the condo board of their building or feel the board is behaving irresponsibly.

“The majority of complaints we hear from condo owners are about property managers or the board of directors,” says Pinizzotto. “They may be doing things they should not or not listening to owners or returning calls.”

If condo owners look to the Ministry of Consumer Services for help in these situations, they will likely be told that their only recourse is to go to court, says Pinizzotto. “So you have nowhere to go unless you spend tons of money.”

If the court rules in favour of the condo board, owners may even wind up paying not just their own court costs but the board’s as well, she adds. And if condo owners expect their building’s property manager to support them in a conflict with the board, they are likely to be disappointed, says Pinizzotto. For starters, as an employee of the property management company, “property managers won’t want to cause conflict,” she says. Moreover, in many cases “people without credentials are being hired as property managers – people who know nothing about condos.”

The ministry says that despite being responsible for multi-million dollar buildings and massive operating budgets, condo managers are not currently required to have training or even an understanding of the Condominium Act, bylaws and rules, finances, building maintenance or contracting out of services such as cleaning and landscaping.

With the government’s recent proposal to introduce changes to the act, Pinizzotto is cautiously optimistic. But she says although the changes are now on the table, they have not yet actually been agreed to.

Critics say there is a need to be vigilant, in order to avoid self-regulatory models that entrench private interests and shut out consumers – a pattern that has often been prevalent in the condo industry.

The first of several changes now being proposed to the Condominium Act involves introducing mandatory qualifications for condominium property managers/management companies.

The condo industry is booming and evolving and condo management is becoming increasingly complex, requiring a high level of competence, says Consumer Services Minister Tracy MacCharles.

“There is an overwhelming consensus that condominium managers be qualified and licensed to carry out their significant responsibilities,” says MacCharles. “One in 10 people in Ontario live in a condominium and their quality of life depends to a great degree on qualified, well-trained condominium managers.”

Exactly what the required qualifications for condo property management should be and how an independent regulatory licensing authority to oversee licensing and standards would be set up are still under review, with a final report imminent.

Pinizzotto hopes to see mandatory qualifications tied into a licensing body, and “we would like that licensing body to be the Real Estate Council of Ontario (RECO),” she says. She’d also like to see RECO involved in some way in supplying the training and courses.

Manager qualifications and licensing are the tip of the iceberg, she says. She has concerns around myriad aspects of the Condominium Act and condo development in general and continues to lobby around issues ranging from condominium finances and reserve fund management to dispute resolution, sustainability, building safety standards and compliance, short-term rentals, standardization of documents, maintenance fees and much more.

The government has said it will examine and address many of these concerns, but Pinizzotto is well aware she will have no shortage of ongoing reasons to continue to lobby and advocate for condo owners in the increasingly complex condominium marketplace.

For starters, she would like to see concrete evidence – and not just promises – that measures are being taken to modernize the Condominium Act.

Although, common sense dictates Managers should be licensed, it should never be allowed to fall under RECO unless they are required to become licensed to trade in real estate as well.

Managers are already governed by the court system, if the condo board/members simply use the threat of that tool to demand ethical management. Most Management issues are tied to FRAUD or misrepresentation of qualifications or failure of due diligence as required by law already.

Boards themselves are open to lawsuits for failing to do their own due diligence on hiring of Managers but again they go uncontested because Condo Owners don’t use their rights to hold boards accountable.

Allowing RECO to expand beyond it’s currently confined oversight of those licensed to trade in real estate, opens the door to a further expansion of roles to non-licensed individuals.

The Professional Agents and Brokerages, those who represent the best in the profession, cannot afford to allow RECO an expanded mandate. Until RECO governs the profession appropriately, expanding a mandate would be a poor business decision for Agents and Brokerages.

I couldn’t agree with Linda more. We need to have qualified licensed condo managers. I have studied this complex condominium act and I know that there are several areas that need improvement. Thank you Linda for your ongoing efforts to advocate for this cause.

Linda Pinizzotto has been heavily involved with this area of business for years – she’s a HUGE consumer advocate and is really making a difference! I love hearing about all the changes she’s had her hands on – VERY WELL DONE!!